The government targets the manufacturing industry to grow in the range of 4.80 - 5.30 percent this year - Photo by InsiderStories.

JAKARTA (TheInsiderStories) – The government targets the manufacturing industry to grow in the range of 4.80 – 5.30 percent this year along with the soaring productivity of a number of sectors through additional investments. The contribution of the non-oil and gas processing industry is expected to rise to 17.80 – 17.95 percent from 17.58 – 17.70 percent in 2019.

“So the government is now focusing on developing the manufacturing industry sector. In 2019, we set at 4.48 – 4.60 percent, and this year it is projected to 4.80 – 5.30 percent,” Industry Minister Agus Gumiwang Kartasasmita told a press conference in Jakarta on Monday (01/06).

So far, the minister went on, the industrial sector has a strategic role because it consistently provides the largest contribution to the countries economy. Moreover, industrial activity has broad dual effects for increasing the added value of domestic raw materials, absorption of local labor, and foreign exchange earnings from exports.

Therefore, the government is intensively attracting investment, especially for export-oriented industrial sectors, import-substitution, and labor-intensive sectors. In the January-September 2019, the investment value of the industrial sector penetrated Rp147.3 trillion (US$10.52 billion), with a cumulative value since 2015 of Rp1,216.2 trillion.

“We project that the investment value in 2019 will be Rp188.8 – 204.6 trillion. Whereas in 2020, investment in the industrial sector is targeted to reach Rp307 – 351 trillion. This certainly needs to be supported by the completion of investment constraints and the regulations through the omnibus law bill, which is currently being discussed by the government,” the minister noted.

As investment in the industrial sector increases, employment trends also continue to grow. This can be seen in 2015 to August 2019, the number of workers in the industrial sector has reached 18.93 million people. Meanwhile, in 2020, the number of workers in the industrial sector is estimated at 19.59 – 19.66 million.

To facilitate investment coming into the country, the government continues to prioritize the spread of industries outside Java, one of which is through the development of priority industrial areas. In 2020-2024, there are 27 priority industrial areas planned, namely 14 on the island of Sumatra, six on Kalimantan, one on Madura and Java, three on Sulawesi and Maluku Islands, one on Papua and West Nusa Tenggara.

The government is overseeing several large industrial sector investments from Taiwan and the United States, including CPC Corporation (Taiwan) in the petrochemical industry sector, LiteMax (Taiwan) in the electronics industry sector and Smart City, Taiwan Sugar Corp (Taiwan) in the sugar industry sector, and UNICAL (US) in the aerospace industry sector, Kartasasmita said.

The minister further explained, from January to October 2019, exports of manufactured products at $105.05 billion. The three sectors which were the biggest contributors were the food and beverage industry of $21.73 billion, followed by the base metal industry at $14.64 billion, and the textile and apparel industry amounting to $10.84 billion.

“Therefore, the industrial sector continues to be encouraged to be able to increase the exports, both through increasing the competitiveness of industrial products and expanding export markets to new export destination countries,” he said.

US$1=Rp14,000

Written by Lexy Nantu, Email: lexy@theinsiderstories.com